Summary

This document, produced by the Resolution Foundation, provides a detailed profile of the low-to-middle income group in the UK. An earlier briefing has dealt with the Resolution Foundation’s analysis of the causes of low income and of the stagnation in the group’s earnings growth over the past decade.

The group comprise about one third of all working age households in Britain, amounting to 9,800,000 adults (7,800,000 of whom are in work), and 5,000,000 children. The most common type of household in this group is a couple with children.

Britain has the second largest low wage economy in the developed world, behind only the USA in a 2009 ranking of 20 OECD countries. Based on the OECD’s threshold (two-thirds of median pay), 21 per cent of people in Britain are low paid. Low pay particularly affects women, those who work part-time or doing agency work or other types of temporary employment.

The report concludes that under current policy settings and given the likely poor performance of the economy, low-to-middle income groups will be no better off in 2017-18 than they were in 1997-98. A lower propensity to save or to become owner-occupiers means that many face poverty in old age.

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